Yvan Loubier

[Taxation, February 6th, 1997]

Since this would have no effect on the preparations for the taxpayer's retirement, is he prepared to implement an employment RRSP program, which could give a boost to over two thirds of the jobs created annually, which qualify as self-employment.

[Taxation, February 6th, 1997]

Mr. Speaker, I have the Minister of Finance's answer to this question, because it was a question.

At the moment, we have the home buyers' plan. It enables people to draw on their RRSP in order to purchase their first home. Four years later, they have to start repaying what they borrowed at the rate of one thirteenth of the total amount a year over the next thirteen years.

In other words, taxpayers borrow from themselves. We are proposing exactly the same thing. Under an employment RRSP program, an unemployed taxpayer could create his own job with a start-up fund where he could take-

[Taxation, February 6th, 1997]

Mr. Speaker, the Minister of Finance was to table his three pages. We are still

waiting for him to table them in the House. For his three pages, we could give him three hundred pages of analyses of corporate and individual taxes.

The government often says that job creation is its primary goal. The Minister of Finance has said that "every effort of government, including the tax system, must be directed toward that end".

My question is for the Minister of Finance. If the Minister of Finance thinks that taxes can play a determining role in creating jobs, would it not make sense to immediately implement the Bloc Quebecois' suggestion of creating an employment RRSP program?

[Excise Tax Act, February 6th, 1997]

moved:

Motion No. 121

That Bill C-70 be amended by deleting Clause 263.

Motion No. 122

That Bill C-70 be amended by deleting Clause 264.

Motion No. 123

That Bill C-70 be amended by deleting Clause 265.

Motion No. 124

That Bill C-70 be amended by deleting Clause 266.

Mr. Speaker, it is a pleasure to speak to the third group of motions regarding Bill C-70 and the so-called harmonization agreement between the federal government and three Maritime provinces, and I am referring to the harmonization of federal and provincial sales tax.

When we talk about harmonization, the subject of this third group of motions, we think about harmony, which means everything is all right and unfolding as it should. It "flies through the air with the greatest of ease", but that is certainly not the case with this bill.

In January, when many of my Liberal colleagues were still on the slopes, the finance committee was sitting, and for three days, only three days, it invited representatives from the Maritimes to appear before Liberal, Bloc and Reform members. The government wanted to rush this bill through. It wanted to silence the opposition. I must say that in three days we got a very interesting sample of opposition, even from the Maritimes, to the proposed harmonization of the GST.

One major witness, the Retail Council of Canada, whose members are responsible for 65 per cent of the retail trade, told us that this policy, this Bill C-70, should be scrapped.

They were not against harmonization, far from it. In Quebec, we saw the advantages as far back as 1991, when we harmonized the sales tax with the federal GST, and since Quebec administers the GST on behalf of the federal government, we can hardly be against harmonization. We are in favour. However, the bill before the House today creates almost insurmountable problems for business.

One of those problems is including the tax in the price of the product. The provisions of the bill allow merchants some latitude on whether they want to include the tax or indicate it separately, include it directly or only on certain products, and there are any number of exceptions.

According to the Retail Council of Canada, we could have a situation where we would have four different ways of labelling the same product. How is the consumer supposed to find his way through this maze?

Furthermore, people may be completely confused as to the actual price of a product while the new system is being phased in by the three Maritime provinces, where merchants will have four months to comply with the new sales tax legislation.

I think that anyone would be foolish to include the tax in his prices, because these prices will not look very competitive. There are quite a few problems here.

According to the Retail Council of Canada, phasing in the new system will cost about $100 million. That is not exactly peanuts for merchants in the three Maritime provinces. It will cost merchants $100 million for additional adjustments and $90 million annually to administer the new price structure, the new system that will be applied in these three provinces.

During those three days, we heard some highly interesting testimony from representatives of companies, not small ones, but

very big Canadian companies which do business in all of the provinces. Sears Canada, for example, made the following comment on this bill: "The use of prices which incorporate the tax in a partially harmonized system will mean higher costs and more complex systems for Canadian retailers".

Sears has a catalogue shopping system, as you probably know. It will produce 52 million catalogues in 1997. The production of "harmonized" catalogues, to fit in with the so-called harmonized system in the Maritimes, will cost Sears a fortune.

We heard from other witnesses such as Canadian Tire, and I shall take the liberty of quoting their opposition to the government's plan and to the terrible complications imposed on them when it comes to pricing and stock management. To quote Canadian Tire:

"We are opposed to the piecemeal approach to the application of tax included pricing as part of the introduction of the new HST. This would create very significant ongoing costs as well as extreme confusion to our customers. There are no savings. In fact, there are increased costs".

This is a quote from Canadian Tire's brief. There are companies like Canadian Tire and Sears Canada, and other major companies, which do business everywhere in Canada and have to prepare shipments of products to branch stores from a centralized product source. They will have terrible problems in managing various products that will then need to be shipped out to branches.

Canadian Tire, for example, will be forced to divide its huge central warehouse into two parts: one for the products destined for the three Maritime provinces where harmonization is planned and one for those destined for the rest of Canada, as the price labels will be different. Products will have to be stocked specifically for the three Maritime provinces, where an agreement has been signed which makes no sense.

Imagine, companies already find it complicated and expensive enough to handle their stocks, and now they are going to have a dual stock system imposed upon them, for goods to be shipped to the Maritimes and goods shipped to other provinces, a dual pricing and labelling system and, what is more, the three Maritime provinces will have complete leeway in the way they do their price labelling. Let me tell you, we are not out of the woods yet.

That is why these major companies have made representations to the finance committee. Others could have as well, but could not afford to come to Ottawa. There are other small businesses opposed to this bill. They have asked that application of the bill be deferred, because it is not manageable, is more costly to businesses, and is a complex system such as has never been seen anywhere else in the world. What is more, instead of making consumers' lives easier, it makes the system more confusing. We are no longer in the good old days at the beginning of this century.

Why do the members of the government not recognize that to err is human and that they may have made a mistake in this agreement with the maritimes? When they realize they made a mistake-this is what we teach young children when they start to understand common sense-we are prepared to forgive them. But they have to take the agreement, tear it up and stop muddling things up with their total incompetence. It makes no sense.

Even in the maritimes, even with a gift of $1 billion, they oppose it. They totally disagree with this way of handling the GST where $1 billion of their tax money is spent to compensate the governments of the three maritime provinces in order to make the Minister of Finance look good and to get the government out of a mess. When we get to the point where, even with a gift like this, the people in the maritimes are saying that the bill is stupid, we have to listen to them.

It is not only the nasty separatists, as the slugs opposite keep saying daily, it is a matter of common sense and good economic management, of giving business every opportunity to perform in an increasingly competitive world and, above all, of making consumers' lives easier. Although this bill is supposed to simplify their lives, it shamelessly complicates them.

[Excise Tax Act, February 6th, 1997]

moved:

Motion No. 118

That Bill C-70 be amended by deleting Clause 261.

Motion No. 119

That Bill C-70 be amended by deleting Clause 262.

[Excise Tax Act, February 6th, 1997]

Mr. Speaker, this is a bill which, according to the motions tabled, deals with the GST harmonization process in three Maritime provinces.

Where is the harmonization? What do they mean by harmonization? There is no harmonization in this bill, in this agreement with the Maritimes. It is a local agreement.

When it comes to harmony, we heard from witnesses in the finance committee recently that they are far from having harmony in the three Maritime provinces. This is particularly true for the businessmen who are, at the present time, furious with the government because of one of the so-called harmonization clauses, which would include in the product price the 15 per cent tax rate decreed by the government, which replaces the GST in these three provinces and the numerous sales taxes that were in place until now.

Imagine the terrible headache this represents for businesses which distribute their products to other Canadian provinces, or have branches in those provinces. It is already difficult for a business to manage a price structure when a number of different products are involved, so imagine managing not one price structure but two, with all that this involves in the way of computer programs, stock management plans and so on.

Businessmen in these three provinces have asked the government to review this section of its bill in order not to include the new tax in the price, because they no longer know which side is up. This is the first point in any discussion of harmonization: that there is no harmonization.

Second, when we speak of harmonization, we must speak of true harmonization. In 1991, Quebec harmonized its sales tax with the federal GST. Quebec even collects the GST on behalf of the federal government.

Quebec has never demanded, nor has it ever received, compensation for losses or costs incurred because of this harmonization. The three Maritime provinces have come to the aid of the Minister of Finance on the GST, accepting the so-called harmonization, which is supposed to serve as a model for all of Canada.

However, this gesture costs $1 billion or thereabouts, $961 million, if I remember correctly, in compensation. This is nearly $1 billion our generous Minister of Finance paid, using our money, the money of taxpayers who are listening, to compensate the maritimes as part of a purely political agreement which does nothing to deal with the problem of the GST and especially not the problems Canadian Liberals have with the GST.

The Prime Minister, his Minister of Finance and the Deputy Prime Minister made a solemn commitment in 1993, in 1992 even before the election campaign and as far back as 1989, when the GST was coming on stream, to scrap this hated tax. That is how the Liberals referred to the GST. They ranted and raved. They said:

"We will strike the GST".

Those are the words of the Prime Minister. The Deputy Prime Minister said: "We hate this tax and we will scrap it". They have not scrapped it, and now they want to harmonize it. It will costs us $1 billion for a harmonization that in fact does not exist and which is not what the Canadian public understood those guys opposite would do.

They served us up a pack of lies, and they have been doing that for three and a half years. A few days ago I was listening to the Premier of New Brunswick, Frank McKenna. I must admit I was shocked, upset and even insulted by the way he behaved on his trip to Asia with Team Canada. I think it is inconscionable that on his Asian trip, the Premier of New Brunswick, instead of recruiting local companies or attracting potential customers, governments and big corporations, was trying to recruit companies from Quebec and get them to move to New Brunswick.

Do you know what Mr. McKenna's message is when he does this kind of recruiting, when he tries to steal from his neighbour on a trip intended as an opportunity to find new international markets and not to steal companies from Quebec? Do you know what he told those companies? He told them what he told companies from Ontario: "If you move to our province, for the next two or three years, your corporate tax burden will be reduced by $400 million". So where will those $400 million come from?

What a coincidence: it just happens to be New Brunswick's share of the compensation paid by the federal government for harmonizing the provincial sales tax with the GST.

What this means, and this is absolutely crazy and unfair to boot, is that federal money, one quarter of which comes out of the pockets of Quebecers, is used to finance a corporate raider, Mr. McKenna, so he can attract Quebec companies and in the process transfer Quebec jobs to New Brunswick. That is the spirit of federalism. Amazing. I never saw anything like it.

New Brunswick is no longer the poor little province from the maritimes. New Brunswick is building itself an industrial force in the high tech sector with our money and, what is more, its premier had the gall in Asia to raid our firms in an effort to attract them to New Brunswick. This is unacceptable and it is an indirect effect of a supposed political harmonization of sales taxes in the maritimes that our show off Minister of Finance presented as a revelation he received from somewhere or other to get out of the mess the government was in with the GST.

This minister, who claims to be a strong federalist and who would thus normally treat all the provinces in Canada the same way and co-operate with them, ends up subsidizing one province to dip into another, its neighbour, and draw business away. It makes no sense. This kind of behaviour is unacceptable.

If the approach used in the case of the famous compensation of nearly $1 billion, which comes out of our pockets to buy three maritime provinces in the GST-sales tax harmonization process, were applied to what Quebec did in 1991, the federal government ought to pay Quebec $2 billion.

If it insists on paying this compensation of nearly $1 billion, it should pay the Quebec government $2 billion. "Out of the question", say government representatives, "have you lost your marbles?" We have not lost our marbles. If we used the calculations and the logic the Minister of Finance put forward in signing the agreement with the maritime provinces, then, if the maritime provinces are entitled to nearly $1 billion, Quebec is entitled to nearly $2 billion for the harmonization it has done since 1991. This is in addition to the other bills we have often sent the government, but this one, I must admit, is particularly hard to take.

In Quebec in 1991, we were good boys and girls. We decided we were going to make things easy for our businesses and set an example as well by harmonizing and thus lead a movement in the other provinces of Canada toward a harmonized system to facilitate interprovincial trade. Billions are involved. Trade between Ontario and Quebec in particular represents $36 billion. Our reward for this vision is nothing. We are being treated as if we are worth less than

nothing. The maritimes get $1 billion. We are entitled to $2 billion, instead we are sent packing as if our request were unwarranted.

So, clearly, in the motions in Group No. 2 on harmonization, we totally disagree with the unreasonable, unfair and unacceptable scheme in the three maritime provinces.

[Excise Tax Act, February 6th, 1997]

moved:

Motion No. 117

That Bill C-70 be amended by deleting Clause 255.

[Excise Tax Act, February 6th, 1997]

moved:

Motion No. 114

That Bill C-70 be amended by adding after line 45 on page 336 the following:

"253.1 (1) Schedule VI of the Act is amended by adding the following after Part VII:

Part VII.1 PRINTED BOOKS, AUDIO RECORDINGS OF PRINTED BOOKS AND VERSIONS OF SCRIPTURES OF ANY RELIGION

1. In this Part, "printed book" does not include anything that is or the main component of which is a ) a newspaper; b ) a magazine or periodical acquired otherwise than by way of subscription; c ) a magazine or periodical in which the printed space devoted to advertising is more than 5 per cent of the total printed space; d ) a brochure or pamphlet; e ) a sales catalogue, a price list or advertising material; f ) a warranty booklet or an owner's manual; g ) a book designed primarily for writing on; h ) a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps or stickers; i ) a cut-out book or a press-out book; j ) a program relating to an event or performance; k ) an agenda, calendar, syllabus or timetable; l ) a directory, an assemblage of charts or an assemblage of street or road maps, but not including

(i) a guidebook, or

(ii) an atlas that consists in whole or in part of maps, other than street or road maps; m ) a rate book; n ) an assemblage of blueprints, patterns or stencils; o ) prescribed property; or p ) an assemblage or collection of, or any item similar to, items included in any of paragraphs ( a ) to ( o ).

1. The supply of a printed book or an update of such a book.

2. The supply of an audio recording all or substantially all of which is a spoken recording of a printed book.

3. The supply of a bound or unbound printed version of scripture of any religion.

(2) Subsection (1) comes into force on April 1, 1997."

Motion No. 115

That Bill C-70 be amended by deleting Clause 254.

[Excise Tax Act, February 6th, 1997]

Mr. Speaker, I did not in any way wish to insult my Liberal colleague. If I did not understand what he said, it was because I had not put on my earphones to listen to the interpretation.

[Excise Tax Act, February 6th, 1997]

Mr. Speaker, it is much clearer when the government whip tells us. Yes, we agree to have the divisions on these motions deemed to have been deferred.